While searching for a new credit card, you will come across a lot of lucrative introductory offers ranging from zero percent interest for transferred balances, Reward Programs offering airline mileage and cash back, and discount programs with select merchants. These offers seems enticing to the new users, but before finalizing any credit card keep in mind few factors, listed below :

I. FEES:

The first and foremost factor to consider while the selection process. There are a number of fees associated with using a particular card. Service providers can charge a variety of fees with the most common being annual, closure, over-the-limit and late fees. Every service provider or company maintains different levels of fees. Thus, making it important for the users to read the fine prints carefully and thoroughly beforehand.

1. Annual Fee : An annual fee is a synonym of a membership or participation fee that is charged for having a card. This fee can range from $25 to $50.

2. Closure Fee : Few companies also charge a closure fee while closing any account. This fee also falls within the $25 to $50 range.

3. Over-the-Limit Fee : An over the limit fee is assessed when the sum of your purchases and fees exceed the amount of credit you have available for new charges. Generally speaking, this fee is around $25.

4. Late Fee : Late fees are charged when payments are past due. Some companies assess late fees as early as one day after the payment due date. Late payments can also results in an increase in your annual percentage rate.

II. ANNUAL PERCENTAGE RATE (APR) :

The APR is the second most important factor to be taken in to account while choosing a credit card. It is stated as a yearly rate, and is the interest rate applied to outstanding balances. You must give preference to low interest rates on the selected credit card. It implies that you will have to pay less for using the credit card. A single credit card can apply a different APR for balance transfers, cash advances and purchases.

III. PERKS AND REWARDS :

There are credit card companies that offer perks and rewards to their loyal users. Many companies also use this as a tool to entice the new users. Perks can include a Rewards Program that awards you with airline mileage and cash back on your purchases. Discounts are also offered to the users at selected merchants and credit card registration, which also includea protection cover for you, in case your card is lost or stolen. Unless you are a frequent user of credit, perks should be the last item you consider when selecting a credit card because the biggest payoffs tend to go to the biggest spenders.

IV. CREDIT LIMIT:

The new users should also consider the level of credit that is being offered while selecting a credit card. Credit limit refers to the amount of money that is available for purchases, cash advances, balance transfers, fees and finance charges. It can start as low as $200 for department store credit cards and go into the thousands for major credit cards (Visa and MasterCard) depending on your credit rating and income.

V. GRACE PERIOD :

This is considered as the last factor to think over. Grace Period implies the time period extended for you to pay over your credit card balance in full, without accruing nay interest charges. Ideal cards offer a grace period of 25 days or more than that. But, this period is usually not applicable to cash advances and balance transfers. If you carry a balance from month to month you will pay interest regardless of how many days are in a grace period with only new purchases being exempt for 25 days.

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